A Gift to Environmentalists

President Trump’s Unleashing American Energy speech, especially the portion dealing with the OCS will no doubt unleash a fundraising blitz by environmental organizations who will use scare tactics about OCS development off the Atlantic coast to fill their coffers.

The Five-Year plan that the Interior Department has prepared, and which is open for comment, would not go into effect until 2022. If leases were offered there is no guarantee that companies would bid on them or that oil and gas would be found. Much depends on the outlook for natural gas and crude oil prices, advances in technology as well as the positions on leases taken by coastal states. For decades, coastal states, and communities on the Atlantic coast, have opposed any drilling because of fears of spills that would impose severe economic costs because many rely on tourism.

The Coastal Zone Management Act(CZMA) provides a mechanism for states to be actively involved in the leasing process. Under a reauthorization to the CZMA in 1990, Congress gave states greater authority by eliminating the requirement that there had to be a “direct” effect on a state’s coastal zone for requiring a consistency determination that a proposed lease sale will not impact its land or water use or natural resources in its coastal zone. If the state disagrees with the consistency determination, Interior must follow certain procedures to achieve resolution before holding the lease sale. In addition to requiring compliance with CZMA, there are other environmental laws could limit natural gas and oil activities by imposing additional requirements. These include: The National Environmental Policy Act, the Clean Air Act, the Endangered Species Act, the Clean Water Act, and the National Fishing Enhancement Act.

The fears expressed by coastal communities are not grounded on a solid foundation. Since the Santa Barbara accident in 1969, there has only been one major production accident, The Deep Water Horizon in the Gulf of Mexico. The fact that 40 years lapsed between major production accidents with more than 50,000 wells drilled in US waters is testament to the technology and safety of offshore drilling. Oil spills cause damage but it is not permanent and there are few things in the modern world that are risk free.

Seismic testing to determine the resource base of the Atlantic offshore, which occurs before leasing, does not translate into lease sales and drilling. The abundance of onshore oil and gas made available through fracking technology combined with coastal politics, and the cost of offshore platforms affects the decision calculus of companies when considering whether to bid on an offshore lease.

So, while environmental organizations will make money from the decision about the next five-year plan, the reality is that the outburst of opposition is at least premature and not well informed. Coastal communities own interests will best be served by emotion free analysis and an honest consideration of trade-offs.